Health services multiply economic contributions in Douglas County

Because of a ripple effect, for each job at Lawrence Memorial Hospital, another 0.59 job is created in Douglas County. Pictured are Sean Stubbs, Sonya Schinkel, Naa Britwum and Clifton Sims, who work on the fourth floor at LMH.

This past week, staff at Lawrence Memorial Hospital joined hospitals across the country in celebrating National Hospital Week.

This annual observance recognizes the men and women who, day in and day out, remain committed to improving the health of their communities through compassionate care, constant innovation and unwavering dedication.

Celebrated since 1921 — which coincidentally was the year LMH was founded — National Hospital Week is a time dedicated to reinforcing the valuable contributions hospitals make in our communities.

In Kansas, LMH is one of 128 community hospitals that provide vital health care services 24 hours a day, seven days a week, 365 days a year. Annually, Kansas hospitals staff nearly 12,000 beds; see more than 313,000 inpatients; assist in more than 39,000 births; provide care during more than 7.4 million outpatient visits; and treat more than 1.1 million patients in Kansas emergency departments.

Locally, at 173-bed LMH, last year staff saw 6,661 inpatients; assisted with 1,132 births; provided care during 160,733 outpatient visits; and treated 37,678 emergency patients. Not only do Kansas hospitals serve thousands of individuals, keeping our communities healthy, strong and vibrant, but hospitals also benefit the financial health of our state. As the fifth largest producer of total income and sales in the state, the Kansas health sector is a powerful economic force. In Kansas, hospitals employ more than 81,000 people or 4.3 percent of all job holders and generate $5.2 billion in direct total income.

A January 2014 report, entitled “The Importance of the Health Care Sector to the Kansas Economy,” produced by researchers at the Office of Local Government, K-State Research and Extension, estimated the “gross” impacts associated with the health care sector on economic activity in the state and locally by county.

The report identified three general areas of health care’s importance: health care attracts and retains business and industry; health care attracts and retains retirees; and health care creates jobs in the local economy.

According to the report, in 2011, the most recent year for which information was available, the health services sector accounted for an estimated 7.5 percent of total employment in Douglas County, or about 5,019 jobs. But the full impact goes beyond the number of people employed and the wages they receive. There is a secondary impact or “ripple effect” that comes from local businesses buying and selling to each other and from area workers spending their income for household goods and services. The ripple effect spreads the economic impact of the health sector through the county’s economy.

The report’s authors calculated economic multipliers for eight categories of health services and the total impact of the ripple effect on the Douglas County economy. For example, Lawrence Memorial Hospital employs 1,318 people and has an employment multiplier of 1.59. This means that for each job created at LMH, another 0.59 jobs are created in other businesses and industries in Douglas County. The direct impact of the 1,318 hospital employees results in an indirect impact of 779 jobs (1,318 x 0.59 = 779). Thus, the hospital had a total impact on area employment of 2,097 jobs.

Similarly, multiplier analysis can estimate the total impact on income and retail sales. The report estimated that health services accounted for more than $262 million in total income and about $95 million in retail sales in Douglas County. Of that amount, for every dollar of income generated in the hospital sector in Douglas County, another 43 cents is generated in other businesses and industries in the county’s economy.

Now more than ever, hospitals like LMH play a vital role in the community’s overall health.

The full statewide report and links to county reports can be found on the Kansas Hospital Association website at www.kha-net.org.

Janice Early is Vice President of Marketing and Communications for Lawrence Memorial Hospital. She can be reached at janice.early@lmh.org.

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